PREPARING COPYRIGHTED MATERIAL · 7. A well-conceived, properly executed launch is central to new...

SECTION ONE

PREPARING

By failing to prepare, you are preparing to fail.

—BENJAMIN FRANKLIN (1706–1790), AMERICAN INVENTOR, JOURNALIST, PRINTER, DIPLOMAT, AND STATESMAN

COPYRIG

HTED M

ATERIAL

3

CHAPTER ONE

NEW PRODUCTS—WHAT SEPARATES THE WINNERS FROM THE LOSERS AND WHAT DRIVES SUCCESS

Robert G. Cooper

1.1 Introduction

Product innovation—the development of new and improved products

and services—is crucial to the survival and prosperity of the modern cor-

poration. According to a recent American Productivity & Quality Center

(APQC) benchmarking study, new products launched in the last three years

currently account for 27.3 percent of company sales, on average (Edgett,

2011), and a survey of executive opinion reveals that “enhancing innovation

abilities” is now the number one driver of corporate growth and prosperity

(a decade ago, it was “cost cutting”; Arthur D. Little, 2005). But many new

products do not succeed: The same APQC study reports that just over half

(53.2 percent) of businesses ’ new product development projects achieve

their fi nancial objectives and only 44.4 percent are launched on time.

The Quest for the Critical Success Factors

The keys to new product success outlined in this chapter are based

on numerous research studies of why new products succeed, why

they fail, comparisons of winners and losers, and benchmarking

(Continued)

4 The PDMA Handbook of New Pr oduct Development

The central role of product innovation in business strategy coupled with

the poor innovation performance results in many fi rms has resulted in a

quest for the factors that drive performance and lead to product innovation

success (see “The Quest for the Critical Success Factors”). Understanding

why new products succeed and why some businesses are so much bet-

ter than others at product innovation is central to effective new product

management: It provides insights for managing new product projects (for

example, are certain practices strongly linked to success?) and clues to new

product selection (what are the telltale signs of a winner?). This chapter

reports the fi ndings from myriad studies of what makes new products win-

ners and what makes some businesses more successful than others at prod-

uct development.

Some success drivers distinguish successful new products from unsuc-

cessful ones and thus are most relevant for managing individual

new-product projects (see “Why New Products Succeed—Eight Critical

Success Drivers”). Other success drivers explain why some businesses are

more successful at product innovation than others and hence are most

relevant at the business level (see “Why Businesses Excel—Nine Critical

Success Drivers”).

studies of best-performing businesses. Many of these investigations

have been reported over the years in the PDMA journal, the Journal of Product Innovation Management. Some of the most revealing of these

studies have been the large-sample quantitative studies of success-

ful versus unsuccessful new products (for an excellent review, see

Cooper, 2011a; Montoya-Weiss and Calantone, 1994). They began

with Project SAPPHO in the early 1970s, followed by the NewProd

series of studies, the Stanford Innovation Project, and, subsequently,

studies in countries outside of North America and Europe (Mishra

and Lee, 1996; Song and Parry, 1996). More recently, several large

benchmarking studies of best practices have provided other insights

into how to succeed at product innovation (American Productivity &

Quality Center, 2003, Cooper, Edgett, and Kleinschmidt, 2003). This

long tradition of research has enabled us to pinpoint the critical

success factors—those factors that separate winners from losers—

that are outlined in this chapter.

New Products—What Separates the Winners from the Losers and What Drives Success 5

Why New Products Succeed—Eight Critical Success Drivers (Cooper, 2011a)

1. A unique superior product—a differentiated product that

delivers unique benefi ts and a compelling value proposition

to the customer or user—is the number one driver of new

product profi tability.

2. Building in the voice of the customer—a market-driven and

customer-focused new product process—is critical to success.

3. Doing the homework and front-end loading the project is key to

success: Due diligence done before product development gets

underway pays off!

4. Getting sharp and early product and project defi nition—and

avoiding scope creep and unstable specs—means higher success

rates and faster to market.

5. Spiral development—build, test, obtain feedback, and revise—

putting something in front of the customer early and often gets

the product right.

6. The world product—a global or glocal product (global con-

cept, locally tailored) targeted at international markets—is

far more profi table than the product designed for to meet

one-country needs.

7. A well-conceived, properly executed launch is central to new

product success. And a solid marketing plan is at the heart of

the launch.

8. Speed counts! There are many good ways to accelerate develop-

ment projects, but not at the expense of quality of execution.

1.2 Critical Success Factors at the Project Level

1.2.1 Striving for Unique Superior Products

Delivering products with unique benefi ts and real value to customers and/

or users separates winners from losers more often than any other single

factor. Such superior products have fi ve times the success rate, over four


times the market share, and four times the profitability of “me too,”

copycat, reactive, and ho-hum products with few differentiated charac-

teristics (American Productivity & Quality Center, 2003; Cooper, 2011a;

Cooper, Edgett, and Kleinschmidt, 2003; McNally, Cavusgil, and Calan-

tone, 2010). (Note that the customer buys the product, whereas the user uses

the product; the two are not necessar-

ily the same, although often the terms

are used interchangeably.)

That differentiated, superior prod-

ucts are key to success should come

as no surprise to product innovators.

Apparently, however, this isn ’t obvious

to everyone: Study after study shows

that reactive products and “me too”

offerings are the rule rather than the exception in many businesses ’ new

product efforts, and the majority fail to produce large profi ts.

What do these superior products with unique customer or user

benefi ts have in common? These winning products:

• Feature good value for money for the customer, reduce the customer ’s

total costs (high value in use), and boast excellent price/performance

characteristics

• Provide excellent product quality relative to competitors ’ products and

in terms of how the user measures quality

• Are superior to competing products in terms of meeting users ’ needs,

offer unique features not available on competitive products, or solve a

problem the customer has with a competitive product

• Offer product benefi ts or attributes easily perceived as useful by the

customer and benefi ts that are highly visible

Note that there are at least two elements of product advantage: As

one study notes, product meaningfulness concerns the benefi ts that users

receive from buying and using a new product, whereas product superiority captures the extent to which a new product outperforms competing prod-

ucts (Rijsdijk, Langerak, and Jan, 2011). Note also that “product” means

not only the evident or physical product but the “extended product”—

the entire bundle of benefi ts associated with the product, including the

system supporting the product, product service and support, as well as

the product ’s image.

Superior and differentiated products—ones that deliver unique benefi ts and superior value to the customer—are the number one driver of success and new product profi tability.


Best-performing businesses emphasize these factors in their new

product efforts. The APQC benchmarking study cited above shows that

the best performers are much stronger in terms of offering important

benefi ts, a superior value proposition, and better value for the customer in

their new products (Figure 1.1 ) (American Productivity & Quality Center,

2003; Cooper, Edgett, and Kleinschmidt, 2003). There, “best performers”

were identifi ed as businesses whose product innovation results are supe-

rior on a number of performance metrics: new product profi tability, meet-

ing sales and profi t objectives, time effi ciency and on-time performance,

and the ability to open up new windows of opportunity.

The management implications are clear:

• First, these ingredients of a superior product (Figure 1.1 ) provide a

useful checklist of items to assess the odds of success of a proposed new

product project. They logically become top-priority issues in a project

screening checklist or scoring model.

58.6%

58.6%

65.5%

62.1%

86.2%

40.6%

38.8%

44.1%

34.3%

60.0%

28.0%

15.4%

19.2%

7.7%

23.1%

0% 20% 40% 60% 80% 100%

Superior quality vs.competitors

Superior to competingproducts in meeting

customer needs

Better value for moneyfor customer

Offer customer new &unique benefits

Main benefits areimportant to customer

Percent of Businesses Whose New ProductsHave Competitive Advantage

Worst PerformersAverage BusinessBest Innovators

Ratio:Best vsWorst

3.73

8.06

3.41

3.81

2.09

FIGURE 1.1 A UNIQUE, SUPERIOR PRODUCT IS THE NUMBER ONE DRIVER OF NEW PRODUCT SUCCESS.


• Second, these ingredients become challenges to the project team to

build into their new product design. Note that the defi nition of “what

is unique and superior” must be based on an in-depth understanding of

customer or user needs, wants, problems, likes, and dislikes. This leads

to success factor 1.2.2, discussed in the next section.

But how does one create or build in product superiority? Note that

superiority is derived from design, features, attributes, specifi cations, and

even branding and positioning. The important point here is that superiority is defi ned from the customer ’s or user ’s standpoint, not from those of the

R&D, technology, or design departments. Sometimes product superior-

ity is the result of new technology or a technological breakthrough. But

more than technology and unique features are required to make a prod-

uct superior. Note that features are those things that cost the developer

money. By contrast, benefi ts are what customers pay money for! Often the

two—features and benefi ts—are not the same. So, in defi ning unique ben-efi ts , think of the product as a bundle of benefi ts for the user and a benefi t

as something that customers view as having value to them.

1.2.2 Creating Market-Driven Products and Building in the Voice of the Customer (VoC)

A thorough understanding of customers ’ needs and wants, the competi-

tive situation, and the nature of the market is an essential component of

new product success. This tenet is supported by virtually every study

of product success factors. Conversely, failure to adopt a strong market

orientation in product innovation, unwillingness to undertake the needed

market assessments, and leaving the customer out of product development

spell disaster. These are the culprits found in almost every study of why

new products fail.

A provocative fi nding of a number of studies is that not only does a

strong customer focus improve success rates and profi tability, but it also

leads to reduced time to market Cooper and Edgett, 2002). Contrary to

myth, taking a little extra time to execute quality market analysis and mar-

ket research does not add extra time; rather, it pays off, not only with

higher success rates but also in terms of staying on schedule and achieving

better time effi ciency.

Sadly, a strong market orientation is missing in the majority of fi rms ’

new product projects. Detailed market studies are frequently omitted

(in more than 75 percent of projects, according to one investigation).


Further, marketing activities are the lowest-rated activities of the entire

new product process, rated far below corresponding technological actions.

Moreover, relatively few resources and little money are spent on the mar-

keting actions (except for the launch), accounting for less than 20 percent

of the total project.

The management implication is that a market focus should prevail

throughout the entire new product project, with best practices such as the

following (Griffi n and Hauser, 1996):

• Idea generation: The best ideas come from customers! Market-oriented

idea generation activities, such as focus groups and VoC research

( ethnography, site visits) with customers to determine customers ’

generic needs and/or their problems, lead to superior ideas (Cooper

and Dreher, 2010). Robust ideas also come from innovative users and

web-based customer inputs to help craft the idea or product.

• The design of the product : User and customer inputs have a vital role in

the design of the product—when the product ’s requirements and spec-

ifi cations are being defi ned. Often, market research, when done at all,

is done too late—after the product design has already been decided

and simply as an after-the-fact check. Note that market research must

be used as an input to the design decisions and serve as a guide to the

project team before they charge into the design of the new product.

Best performers determine customer and user needs at the outset,

starting with a user needs-and-wants study (VoC research) in tandem

with a competitive product analysis (competitive benchmarking). Best

practices here include in-depth personal interviews with customers and

users; customer site visits (done by the entire project team); “camping

out” with the customer (extended site visits or ethnography); customer

panels; and large- sample quantitative market research. Even in the

case of technology-driven new products (where the idea comes from a

technology or laboratory source, perhaps a technology breakthrough),

the likelihood of success is greatly enhanced if customer and market-

place inputs are built into the project soon after its inception.

• Before pushing ahead with development: Best performers test the prod-

uct concept with the customer by presenting a representation of the

product—via models, mock-ups, protocepts, computer-aided design

(CAD) drawings, and even virtual prototypes—and gauging the

customer ’s interest, liking, and purchase intent. It ’s much cheaper to

test and learn before development begins than to develop the product

fi rst and then begin customer testing.


• Throughout the entire project: Customer inputs shouldn ’t cease at the

completion of the predevelopment market studies. Seeking customer

inputs and testing concepts or designs with the user is very much an itera-

tive process— spiral development , as outlined in Section 1.2.5.. By bringing

the customer into the process to view facets of the product via a series of

concept tests, rapid prototyping and tests, customer trials, and test mar-

kets, the developer verifi es all assumptions about the winning design.

1.2.3 Predevelopment Work—the Homework

Homework is critical to winning. Countless studies reveal that the steps that

precede the actual design and development of the product make the differ-

ence between winning and losing (Cooper, 2011a; Edgett, 2011). Successful

fi rms spend about twice as much time and money as unsuccessful fi rms, as

a percent of total project costs on these vital front-end activities:

• Initial screening—the first decision to begin the project (the idea

screen)

• Preliminary market assessment—the initial market study

• Preliminary technical assessment—the first and quick technical

appraisal of the project

• The detailed market study, market research, and VoC research

(described in Section 1.2.2)

• The business and fi nancial analysis just before the decision to go to

development (building the business case)

Another issue is the balance within the homework phase. Best perform-

ers strike an appropriate balance between market/business-oriented tasks

and technical tasks, while worst performers tend to push ahead on the

technical side and pay lip service to marketing and business issues in the

early phases of the project. Figure 1.2 shows how much better best perform-

ers execute the homework activities, especially the early-stage marketing/

business tasks. Surprisingly, most fi rms confess to serious weaknesses in the

front-end or predevelopment steps of their new product process. Pitifully

small amounts of time and money are devoted to these critical steps: only

about 7 percent of the total project dollar cost and 16 percent of the effort.

“More homework means longer development times” is a frequently

voiced complaint. This is a valid concern, but experience has shown

that homework pays for itself in reduced development times as well as

improved success rates.


• First, all the evidence points to a much higher likelihood of product

failure if the homework is omitted. So, the choice is between a slightly

longer project and greatly increased odds of failure.

• Second, better project definition, the result of sound homework,

actually speeds up the development process. One of the major causes of

time slippage is poorly defi ned projects as they enter the development

stage: vague targets and moving goalposts.

• Third, given the inevitable product design evolution that occurs dur-

ing the life of a project, the majority of these design improvements or

changes should not be made as the product is moving out of develop-

ment and into production. More predevelopment homework antici-

pates these changes and encourages their occurrence earlier in the

process rather than later, when they are more costly.

The message is clear: Don ’t skimp on the homework! First, cutting

out homework drives success rates down; second, eliminating homework

to save time today will lead to wasted time tomorrow. It ’s a “penny wise,

pound foolish” way to save time. As Toyota ’s new products handbook

57.1%

37.9%

32.1%

37.9%

29.2%

64.3%

55.2%

53.6%

26.3%

16.5%

27.0%

18.3%

21.3%

43.7%

36.3%

31.1%

23.1%

4.0%

15.4%

7.7%

12.0%

23.1%

34.6%

15.4%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Business/financial analysis

Value assessment ofproduct to customer

Concept testing withcustomer

Market research, VoC

Preliminary operationsassessment

Preliminary technicalassessment

Preliminary marketassessment

Initial idea screening

Percent of Businesses That Execute Well

Ratio:Best vsWorst

3.48

1.60

2.78

2.43

4.92

2.08

9.48

2.47


FIGURE 1.2 QUALITY OF EXECUTION IN THE FUZZY FRONT END IMPACTS STRONGLY ON NEW PRODUCT SUCCESS.


(Morgan, 2005) recommends: Front-end load the project . That is, undertake

a higher proportion of the project ’s work in the early stages and ensure

that no signifi cant project move into the development stage without the

actions listed in Figure 1.2 —early-stage activities that should be built into

the idea-to-launch system.

1.2.4 Sharp, Early, Stable, and Fact-Based Project and Product Defi nition

Two of the worst time wasters in a new-product project are project scope

creep and unstable product specs. Scope creep means that the defi nition

of the project constantly changes: The project might begin as a single-

customer initiative, then be targeted at multiple users, and fi nally end up

being a platform for a new family of products. Unstable product specs means

that the product defi nition – product requirements and specifi cations –

keeps changing throughout the development stage; thus, the technical

people chase elusive development targets—moving goalposts—and take

forever to get to the goal.

Securing sharp, early, stable, and fact-based project and product defi nition dur-

ing the homework phase is a solution. How well the project and product

are defi ned before the development stage begins is a major success factor,

impacting positively on both profi tability and reduced time to market. Some

companies undertake excellent product and project defi nition before the

door is opened to a full development program. This defi nition includes:

• Defi nition of the project ’s scope (e.g., domestic versus international;

line extension versus new product item versus platform development)

• Specifi cation of the target market: exactly who the intended customers

or users are

• Description of the product concept and the benefi ts to be delivered to

the user (including the value proposition)

• Delineation of the positioning strat-

egy, including the target price

• A list of the product ’s features, attri-

butes, requirements, and specifi ca-

tions (prioritized: “must have” and

“would like to have”)

Unless the fi ve items in the defi nition

list are clearly defi ned, written down, and

Securing sharp, early, stable, and fact-based project and product defi nition dur-ing the homework phase is one of the strongest drivers of cycle time reduction and new product success.


agreed to by all parties prior to entering the development stage, the odds of

failure will skyrocket. Here ’s why:

• Building in a defi nition step forces more attention to the front-end or

predevelopment activities, a key success driver (Section 1.2.3).

• The definition serves as a communication tool and guide. All party

agreement or buy-in means that all functional areas involved in the

project have a clear and consistent defi nition of what the product and

project are and are committed to them.

• This defi nition also provides a clear set of objectives for the develop-

ment stage of the project and for development team members: The

goalposts are defi ned and clearly visible.

1.2.5 Spiral Development—Build, Test, Feedback, and Revise

Spiral development is the way fast-paced teams handle the dynamic infor-

mation process with fluid, changing information. Spiral development

helps the project team get the product and product defi nition right, in

spite of the fact that some information is fluid and some may even be

unreliable when the team moves into the development stage.

Many businesses use too rigid and linear a process for product develop-

ment. The project team diligently visits customers in the predevelopment

or front-end stages and determines customer needs and requirements as

best they can. Front-end work or homework is properly done; and the

product specs are determined, and the product defi nition is fi xed. So

far, so good.

The development stage gets underway but proceeds in a linear and rigid fashion . The project team moves the project forward following a “heads-

down” rather than a “heads-up” approach. Some 10 or 15 months pass, and

at the end of this linear development stage, the product is ready for fi eld

trials or customer tests. Then everything goes wrong. When presented with

the prototype or beta product for testing, the original intended customers

now indicate that “this is not quite what we had in mind” or that “things

have changed.” Or perhaps a new competitive product has been launched

that alters the competitive landscape.

Smart project teams and businesses practice spiral development

(based on agile development , as used in the information technology indus-

try). They build in a series of iterative steps or loops whereby successive

versions of the product are shown to the customer to seek feedback

and verifi cation, as shown in Figure 1.3 . These loops are a series of


“build-test-feedback-and-revise” iterations (their iterative nature leads

to the term spiral development ):

• Build something, even if it ’s only a model or representation of the product.

• Test it: get it in front of the customer or user and gauge interest, liking,

preferences and purchase intent,

likes and dislikes.

• Get feedback: fi nd out the custom-

er ’s reactions firsthand and, most

important, what must be fixed or

changed.

• Revise: update the product defini-

tion based on this feedback, and get

set for the next iteration of build-

test-feedback-and-revise, but this

time with a product version one step

closer to the fi nal product.

1.2.6 The World Product—a Global Orientation

The world is the business arena today; thus, corporate growth and profi tability

depend on a globalization strategy married to product innovation. In global

markets, product development plays a primary role in achieving a sustainable

competitive advantage (Kleinschmidt, de Brentani, and Salomo 2007).

The Customer or User

Gate

BuildBusiness

Case

VoC User Needs &

Wants Study

Full PropConcept

Test

Development Stage

Rapid-Proto &

Test

1st-Proto &

Test

NextProto &Test

Testing &Validation

Field Trial,Beta Test

Gate Gate

FIGURE 1.3 SPIRAL DEVELOPMENT—A SERIES OF BUILD-TEST-FEEDBACK-REVISE ITERATIONS—GETS

THE PRODUCT RIGHT WITH NO TIME WASTED.

People don’t know what they’re looking for until they see it or experience it. So, get something in front of the customer or user fast—and keep repeating these tests all the way through to formal product testing.


Multinational firms that take a global approach to new product

development outperform those that concentrate their research spending

in their home market (de Brentani and Kleinschmidt, 2004; de Brentani,

Kleinschmidt, and Salomo, 2010; The Economist , 2008; Kleinschmidt, de

Brentani, & Salomo, 2007). International products designed for and

targeted at world and nearest neighbor export markets are the best-

performing new products. By contrast, products designed for only the

domestic or home market, and later adjusted and sold to nearest neighbor

export markets, fare worse. The magnitude of the differences between

international new products and domestic products is striking: two or three

to one on various performance gauges.

The management implication of these and other studies is that global-ization of markets demands global new products . To defi ne the new products

market as domestic and perhaps including a few other nearby conve-

nient countries severely limits market opportunities. For maximum suc-

cess in product innovation, the objective must be to design for the world

and market to the world. Sadly, this international dimension is often

overlooked or, if included, is handled late in the development process

or as a side issue.

A global orientation means defi ning the market as an international

one and designing products to meet international requirements, not just

domestic ones. The result is either a global product (one version for the

entire world) or a glocal product (one development effort, one product

concept or platform, but perhaps several product variants to satisfy different

international markets). Another option is two glocal products—for exam-

ple, one designed for western or developed countries, but with different

versions to suit different countries or regions; and an Asian version to sell

to developing countries, but, again, tailored to suit different needs in these

countries. A global orientation also means undertaking VoC research, con-

cept testing, and product testing in multiple countries rather than just

the home country and launching in multiple countries concurrently or in

rapid succession; it also means relying on a global project team with team

members in multiple countries (only one new product project team in fi ve

is reported to be a global development team; de Brentani, Kleinschmidt,

and Salomo, 2010; Kleinschmidt, de Brentani, and Salomo, 2007).

1.2.7 Planning and Resourcing the Launch

Ralph Waldo Emerson once said, “Build a better mousetrap and the world

will beat a path to your door.” The problem is that Emerson was a poet, not

a businessman. Not only must the product be a superior one, but it must


also be launched, marketed, and supported in a profi cient manner. A quality

launch is strongly linked to new product profi tability, and effective after-sales

service is central to the successful launch of the new product (Di Benedetto,

1999; Montoya-Weiss and Calantone, 1994; Song and Parry, 1996).

The message is this: Don ’t assume that good products sell themselves,

and don ’t treat the launch as an afterthought. Even though the launch is

the last step in the project, never underestimate its importance. A well-

integrated and properly targeted launch does not occur by accident,

however; it is the result of a fi ne-tuned marketing plan , properly backed and

resourced and profi ciently executed. There are fi ve requirements for an

effective market launch plan:

1. The development of the market launch plan is an integral part of the new product process . It is as central to the new product process as the develop-

ment of the product itself.

2. The development of the market launch plan must begin early in the new

product project. It should not be left as an afterthought to be under-

taken as the product nears commercialization.

3. A market launch plan is only as good as the market intelligence upon

which it is based. Market studies designed to yield information crucial

to marketing planning should be built into the new product project.

4. The launch must be properly resourced—in terms of both people and

dollars. Too often, an otherwise great new product fails to achieve it

sales goals simply because of a underresourced launch.

5. These who will execute the launch—the sales force, technical support

people, other front-line personnel—should be engaged in the devel-

opment of the market launch plan and therefore should be members

of the project team. This ensures valuable input and insight into the

design of the launch effort, availability of resources when needed, and

buy-in by those who must execute the launch—elements critical to a

successful launch (Hultink and Atuahene-Gima, 2000).

1.2.8 Speed—But Not at the Expense of Quality of Execution

Speed is a competitive weapon. Speed yields competitive advantage—the

fi rst on the market; it means less likelihood that the market or competitive

situation has changed; and it results in a quicker realization of profi ts. So,

the goal of reducing the development cycle time is admirable. A word of cau-

tion here, however: Speed is only an interim objective; the ultimate goal is

profi tability. While studies reveal that speed and profi tability are connected,


the relationship is anything but one to one! Further, there is a dark side

to the emphasis on speed: Often the methods used to reduce develop-

ment time yield precisely the opposite effect, and in many cases are very

costly – they are at odds with sound management practices ( Cooper and

Edgett, 2002; Crawford, 1992). The objective remains successful products,

not a series of fast failures! Additionally, overemphasis on speed has led

to trivialization of product development in some fi rms— too many prod-

uct modifi cations and line extensions and not enough real new products

(Cooper, 2005).

Some sound principles that project teams embrace in order to reduce

time to market include:

• Doing the front-end homework and developing early and stable prod-

uct and project defi nitions based on facts rather than hearsay and spec-

ulation (success drivers discussed in Sections 1.2.3 and 1.2.4); this saves

time downstream.

• Building in quality of execution at every stage of the project. The best way

to save time is by avoiding having to cycle back and do it a second time.

• Employing effective cross-functional teams: “Rip apart a badly devel-

oped project and you will unfailingly find 75 percent of slippage

attributable to: ‘siloing,’ or sending memos up and down vertical orga-

nizational “silos” or “stovepipes” for decisions; and sequential problem

solving” (Peters, 1988).

• Using parallel processing : The relay race, sequential, or series approach

to product development is antiquated and inappropriate for today ’s

fast-paced projects.

• Using spiral development , as described in Figure 1.3 . These build-test-

feedback-revise iterations begin with the concept test in Stage 2 (see

Figure 1.7 ) and end with the full fi eld trials (beta tests) in Stage 4.

• Prioritizing and focusing – doing fewer projects but higher-value ones.

By concentrating resources on the truly deserving projects, not only will

the work be done better, it will be done faster.

1.3 Critical Success Factors at the Business Level

Why are some businesses so much more successful at product innovation

than others? Huge differences in product development productivity exist

between the best and worst fi rms, according to a major global study (Arthur

D. Little, 2005). The top 25 percent of fi rms have 12 times as much productivity


in new product development as the bottom, realizing a huge $39 in new

product sales per R&D dollar spent, while the bottom 25 percent of fi rms

achieve only $3.3 in new product sales. In this section, we continue to

explore the theme “drivers of success,” but this time focused on the business rather than the project as the unit of analysis. In short, we consider what distinguishes the most successful businesses when it comes to innovation perfor-

mance (see the box “Why Businesses Excel—Nine Critical Success Drivers”

for a summary of the nine critical success drivers at the business level).

Why Businesses Excel—Nine Critical Success Drivers (Cooper, 2011a)

1. Businesses with superlative performance in new-product

development have a product innovation and technology strategy

to focus the business on the best arenas, and to provide direc-

tion for ideation, roadmapping, and resource allocation.

2. Successful businesses focus: They do fewer development proj-

ects, better projects, and the right mix of projects. They achieve

this by adopting a systematic portfolio management method

and by building tough Go/Kill decision points into their new

product idea-to-launch system.

3. Leveraging core competencies is vital to success; step-out devel-

opment projects, which take the business into new areas (new

markets or new technologies), tend to fail. However, collaborative

development and open innovation can mitigate some risks here.

4. Projects aimed at attractive markets do better; thus, certain key

elements of market attractiveness—market size, growth, and the

competitive situation—are important project selection criteria.

5. The resources must be in place; there is no free lunch in

product innovation.

6. The right organizational structure, design, and teams are major

drivers of product innovation success.

7. Businesses that excel at product innovation have the right

climate and culture that supports and fosters innovative activity.

8. Top management support doesn ’t guarantee success, but it

certainly helps. However, many executives get it wrong.

9. Companies that follow a multistage, disciplined stage-and-gate

idea-to-launch system fare much better than an ad hoc approach

or no system at all.


1.3.1 A Product Innovation and Technology Strategy for the Business

We live in turbulent times. Technology advances at an ever-increasing

pace; customer and market needs are constantly changing; competition

moves at lightning speed; and globalization brings new players and oppor-

tunities into the game. More than ever, businesses need a product innova-tion and technology strategy to help chart the way (Cooper, 2011b, American

Productivity & Quality Center, 2003; Cooper, Edgett, and Kleinschmidt,

2003; Song, X.M., Im, S., van der Bij, H. and Song, L.Z., 2011).

Having a new product strategy for the business is clearly linked to

positive performance (American Productivity & Quality Center, 2003;

Cooper, Edgett, and Kleinschmidt, 2003). The ingredients of such a strat-

egy with the strongest positive impact on performance include the follow-

ing ( Cooper and Edgett, 2010):

1. Clearly defi ned product innovation goals and objectives: Best practice sug-

gests that a business should clearly define its long-term goals for

product innovation—for example, deciding what percentage of the

business ’s sales, profi ts, or growth will come from new products over

the next three or fi ve years.

2. The role of product innovation in achieving the overall businesses goals: Strate-

gists recommend that the product innovation goals of the business be

linked to the overall business goals so that the role of product innova-

tion in achieving business goals is clearly articulated.

3. Strategic arenas defi ned—areas of strategic focus on which to concentrate new product efforts: Focus is the key to an effective innovation strategy. The

goal is to select strategic arenas that are rich with opportunities for

innovation—those that will generate the business ’s future engines of

growth (Cooper, 2011b). The great majority of businesses do desig-

nate strategic arenas—markets, product areas, industry sectors or tech-

nologies—in order to help focus their product development efforts,

although evidence suggests that many business are focused on the wrong arenas —on traditional and sterile areas that fail to yield the opportuni-

ties and development portfolios needed (Cooper, 2005).

4. Strategic buckets employed: Studies of portfolio management methods

reveal that earmarking buckets of resources—funds or person-days—

targeted at different project types or different strategic arenas helps

to ensure strategic alignment and the right mix and balance of devel-

opment projects (Cooper, Edgett, and Kleinschmidt, 2002a). Best

performers utilize strategic buckets two and a half times more often

than worst performers.


5. Product roadmap in place: A product roadmap is an effective way to map

out a series of development initiatives over time in an attack plan, often

fi ve to seven years into the future. A r oadmap is simply a management

group ’s view of how to get to where they want to be or achieve their

desired objective (Albright and Kappel, 2003; McMillan, 2003), and it

provides placemarks for specifi c future development projects. Roadmaps

are used by best performers twice as often as by worst performers.

6. Long-term commitment: Does the business have a long-term view of its new

product efforts? Or is product development largely a short-term effort,

with an absence of longer-term projects? Many businesses are defi cient

here; only 38.1 percent of them have a long-term new product strategy.

By contrast, the majority of best performers have such a strategy.

1.3.2 Focus and Sharp Project Selection Decisions—Portfolio Management

Most companies suffer from too many projects, often the wrong projects,

and not enough resources to mount an effective or timely effort for each

(Cooper, 2011b, Cooper and Edgett, 2002, 2006). This stems from a lack

of adequate project evaluation and prioritization, with negative results:

• First, scarce and valuable resources are wasted on poor projects.

• Second, the truly meritorious projects don ’t receive the resources they

need. The result is that the good projects, starved for resources, move

at a crawl, or just don ’t get done.

The desire to weed out bad projects, coupled with the need to focus

limited resources on the best projects, means that tough Go or Kill and

prioritization decisions must be made. This results in sharper focus, higher

success rates, and shorter times to market. Project evaluations, however,

are consistently cited as being poorly handled or nonexistent: Decisions

involve the wrong people from the wrong functional areas (no functional

alignment); no consistent criteria are

used to screen or rank projects; or

there is simply no will to kill projects at

all—projects are allowed to develop a

life of their own.

What some companies have done is

to redesign their idea-to-launch systems:

They have created a funneling process ,

Introduce tough gates with teeth and learn to “drown some puppies.” The result is better focus—fewer but better development initiatives.


which successively weeds out the poor projects; and they have built in

decision points in the form of tough gates . At gate reviews, senior manage-

ment rigorously scrutinizes projects, and makes Go or Kill and prioritiza-

tion decisions. The use of visible Go/Kill criteria at gates improves decision

effectiveness. Fortunately, certain project characteristics have been identi-

fi ed that consistently separate winners from losers; these characteristics

should be used as criteria for project selection and prioritization. A list of

criteria in a scorecard format —a scoring model—can be used at gate reviews

to rate the project. These criteria include some of the important success

drivers cited in this chapter (Cooper and Edgett, 2006; Cooper, Edgett,

and Kleinschmidt, 2002a, 2002b):

1. Strategic: How well the project aligns with the business ’s strategy and

how strategically important it is

2. Competitive and product advantage: Whether the product is differenti-

ated, offers unique benefi ts, and offers a compelling value proposition

to the user

3. Market attractiveness: How large and growing the market is its long-

term potential, and whether the competitive situation is positive (not

intense, few and weak competitors)

4. Leverage: Whether the project leverages the business ’s core competen-

cies, such as marketing, technology and manufacturing

5. Technical feasibility: The likelihood of being able to develop and manu-

facture the product: is this new science and a technically complex proj-

ect or a technology repackage?

6. Risk and return: The fi nancial prospects for the project (e.g., net pres-

ent value [NPV], internal rate of return [IRR], and payback period)

versus the risk

Selecting projects and choosing winning new product initiatives is only

part of the task, however. Others are selecting the right mix and balance of projects in the development portfolio, seeking strategic alignment in

the portfolio, and ensuring that the business ’s spending on product inno-

vation mirrors its strategic priorities. Many businesses have moved to more

formal portfolio management systems to help allocate resources effectively and

prioritize new product projects (Cooper, Edgett, and Kleinschmidt, 2002a,

2002b). Note that the best-performing businesses have more aggressive

development portfolios and undertake a higher proportion of more inno-

vative new product projects, while the worst-performing ones have a very

timid new product project portfolio (see the breakdown in Figure 1.4 ).


1.3.3 Leveraging Core Competencies—Synergy and Familiarity

“Attack from a position of strength” may be an old adage, but it certainly

applies to the launch of new products. Where synergy with the base

business is lacking, new products fare poorly on average.

Synergy or leverage is a familiar term, but exactly what does it trans-

late into in the context of new products? Synergy means having a strong

fit between the needs of the new product project and the resources,

competencies, and experience of the fi rm in terms of

• R&D or technology resources (for example, ideally the new product

should leverage the business ’s existing technology competencies)

• Marketing, selling (sales force), and distribution (channel) resources

• Brand, image, and marketing communications and promotional assets

• Manufacturing or operations capabilities and resources

• Technical support and customer service resources

• Market research and market intelligence resources

• Management capabilities

These seven synergy or leverage ingredients become obvious checklist

items in a scoring model to prioritize new product projects. If the leverage

16%

25%

24%

~65%~55%~45%10 Point Steps

Best Performers focus more on innovative and game-changing projects

40%

10%

24%

22%

33%

10%

AverageBusiness

7%New-to-the-World Products

19%Major Product Revisions

20%New-to-the-Business Products

28%Incremental Product Improvements &Changes

6%12%Promotional Developments & PackageChanges

BestPerformers

WorstPerformers

FIGURE 1.4 THE BREAKDOWN OF PROJECTS BY PROJECT TYPE SHOWS THE DIFFERENT PORTFOLIOS FOR BEST

VERSUS WORST PERFORMERS IN PRODUCT INNOVATION.


score is low, then there must be other compelling reasons to proceed with the

project. Leverage is not essential, but it certainly improves the odds of winning.

Familiarity is a parallel concept. Some new product projects take the com-

pany into unfamiliar territory: a product category new to the fi rm; new cus-

tomers and unfamiliar needs served; unfamiliar technology; new sales force,

channels, and servicing requirements; or an unfamiliar manufacturing pro-

cess. And the business often pays the price: Step-out projects have a higher

failure rate due to lack of experience, knowledge, skills, and resources.

The encouraging news is that the negative impact here is not as strong

as for most success factors. New and unfamiliar territory certainly results

in lower success rates and profi tability on average, but the success rates are

not dramatically lower. The message is this: Sometimes it is necessary to

venture into new and unfamiliar markets, technologies, or manufacturing

processes and areas where leverage may be limited (e.g., some key skills or

resources are missing). Success rates will suffer. However, strategies such

as collaborative development and open innovation help the developer acquire

the necessary resources, skills, and knowledge for such step-out projects

(Campbell and Cooper, 1999; Chesbrough, 2006; Docherty, 2006). For

example, through open innovation , the developer obtains resources and

knowledge from sources external to the company: ideas for new products;

intellectual property and outsourced development work; marketing and

launch resources; and even licensed products ready to launch.

1.3.4 Targeting Attractive Markets

Market attractiveness is an important strategic variable and plays a role in

notable strategy models, such as Porter ’s “fi ve forces” model and the two-

dimensional GE-McKinsey map or business portfolio grid. In the case of new

products, market attractiveness is also important: New products targeted at

more attractive markets are more successful (Cooper, 2011a; Montoya-Weiss

and Calantone, 1994; Song and Parry, 1996); thus, market attractiveness

should be considered in project selection and scoring models.

There are two dimensions to market attractiveness:

1. Market potential: positive market environments, namely, large and grow-

ing markets—where a strong customer need exists for such products,

where the purchase is an important one for the customer, and where

profi t margins earned by others are high

2. Competitive situation: negative markets characterized by intense competi-

tion; competition on the basis of price; high quality, and strong com-

petitive products; and competitors whose sales force, channel system,

and support service are strongly rated


The message is this: Both elements of market attractiveness—market

potential and competitive situation—impact new product fortunes, and

both should be considered as criteria in any scoring model for project

selection and prioritization.

1.3.5 The Necessary Resources

Too many projects suffer from a lack of time and fi nancial commitment.

The results are predictable: much higher failure rates (American Produc-

tivity & Quality Center, 2003; Cooper, Edgett, and Kleinschmidt, 2003). As

the competitive situation has toughened, companies have responded with

restructuring and doing more with less. And so, resources are limited or

cut back (Cooper and Edgett, 2003). Another reason for failure is trying

to do too many projects with the limited resources available—the inabil-

ity to say “no” to would-be development projects or to kill bad ones. The

resource crunch takes its toll and is the root cause for much of what ails prod-

uct development: a lack of VoC and market input; inadequate front-end

homework; ineffective launches; and overemphasis on simple, fast projects.

Best-practice companies commit the necessary resources to new prod-

ucts much more often than do most fi rms (American Productivity & Qual-

ity Center, 2003; Cooper, Edgett, and Kleinschmidt, 2003). While new

product resources are in short supply across the board—with less than

30 percent of businesses indicating that they have suffi cient resources in

four key functional areas—the best performers appear to be much better

resourced than most fi rms . Equally important, as shown in Figure 1.5 ,

these resources are focused and dedicated, with project team members

not working on too many projects or doing other tasks. Indeed, about

half of the best performers have a ring-fenced product innovation group that

does nothing but work on new products (this is a dedicated cross-functional

group—technology, marketing, and even sales and operations—whose

full-time job is to work on new product projects). Finally, resources must

be available early in the project in order to undertake the essential front-

end homework and early-stage market research outlined above.

1.3.6 The Way Project Teams Are Organized

Product innovation is very much a team effort. Do a postmortem on

any bungled new product project, and invariably you ’ll fi nd each func-

tional area doing its own piece of the project, with very little communi-

cation between players and functions (a fi efdom mentality) and no real


commitment of players to the project. Many studies concur that the way

the project team is organized and functions strongly infl uences project

outcomes (Cooper, 2011a; Cooper, 2011b; Nakata and Im, 2010). Best per-

formers organize their new product project teams as follows ( Figure 1.6 ;

American Productivity & Quality Center, 2003; Cooper, Edgett, and

Kleinschmidt, 2003; Edgett, 2011):

• There is a clearly assigned project team for each significant new

product project—people who are part of the project and do work for

it (only 61.5 percent of businesses have clearly assigned teams, with

the best- performing businesses outdoing the worst by 2:1). And most

important, the project team is cross-functional, with team members

from technology, sales, marketing, operations, and so on—a practice

now embraced by the great majority of businesses. Here, team members

are not just representatives of their function, but rather true members of the project team , shedding their functional loyalties and working together

to a common goal.

51.7%

48.3%

24.1%

20.7%

58.6%

37.9%

21.9%

11.4%

10.7%

38.2%

28.0%

7.7%

0.0%

0.0%

16.0%

0% 10% 20% 30% 40% 50% 60% 70%

An innovation or NPDgroup exists – dedicated to

new products

Team focused – not doingtoo much other work

Team focused – not spreadover too many projects

Adequate resourcesassigned to new-product

projects

Resources allocated basedon project merit

Percent of Businesses

Ratio: Best vs Worst

3.66

∞

∞

6.27

1.85


FIGURE 1.5 PROJECT TEAM FOCUS AND DEDICATED RESOURCES HAVE A STRONG IMPACT ON PERFORMANCE.


• The project team remains on the project from beginning to end, not just

for a short period or a single phase. Almost half of businesses use this

team approach, and it is particularly evident among the best performers.

• There is a clearly identifi ed project leader—a person who is in charge

and responsible for driving the project. And the project leader is

responsible for the project from idea to launch; he or she carries the

project right through the process, and not just one or a few stages.

Worst-performing businesses are weak here.

• A central shared-information system for project team members is in

place—a system that permits sharing of project information and allows

several team members to work concurrently on the same document,

even across functions, locations, and countries.

• Project teams are accountable for their project ’s end result—for exam-

ple, ensuring that projects meet profi t/revenue targets and time tar-

gets. Team accountability is a pivotal best practice, separating the best

from the worst performers by 7:1!

Product development must be run as a multidisciplinary, cross-

functional effort. While the ingredients of good organizational design

should be familiar, surprisingly many businesses have yet to get the message.

FIGURE 1.6 THE WAY DEVELOPMENT PROJECT TEAMS ARE ORGANIZED STRONGLY IMPACTS ON PRODUCT

INNOVATION PERFORMANCE.

65.5%

69.0%

72.4%

55.2%

79.6%

65.5%

79.3%

79.3%

43.8%

58.1%

48.6%

32.4%

63.8%

43.7%

72.1%

61.6%

19.2%

34.6%

23.1%

7.7%

50.0%

24.0%

53.8%

38.6%

0% 20% 40% 60% 80% 100%

Team has sharedinformation system centrally

Leader from beginning toend of project

Team from beginning toend of project

Accountable for project'send results

Identifiable project teamleader

Good cross-functionalcooperation

Team is cross-functional

Assigned team of players

Percent of Businesses

Worst PerformersAverage BusinessBest Innovators Ratio:

Best vsWorst

2.05

1.47

2.73

1.59

7.17

3.13

1.99

3.41


1.3.7 The Right Environment—Climate and Culture

A second organizational success ingredient is a positive climate for innova-

tion. Such a climate has many facets and includes an environment where

(Cooper, 2011b; American Productivity & Quality Center, 2003; Cooper,

Edgett, and Kleinschmidt, 2003; Edgett, 2011)

• Intrepreneurs (internal entrepreneurs) and risk-taking behavior are

supported and encouraged

• Senior management is not afraid to invest in the occasional risky

project

• New product successes are rewarded and recognized (and failures are

not punished)

• Team efforts are recognized rather than individuals

• Senior managers refrain from micromanaging projects and second-

guessing the project team members

• Project review meetings are open (the entire project team participates)

Most businesses are quite weak on almost all of the elements of a posi-

tive climate described in the preceding list, with typically less than one-

third of businesses employing these

practices (but best performers do!)

(American Productivity & Quality Cen-

ter, 2003; Cooper, Edgett, and Klein-

schmidt, 2003; Edgett, 2011). Some

other practices that also drive per-

formance, but are rarely seen except

in a handful of very innovative firms,

include making resources and time

available for creative people to work on their own projects (e.g., via free

scouting time , Friday projects , or bootstrapping funds); allowing the occa-

sional unofficial project to proceed under the radar; setting up skunk works projects—teams operating outside the offi cial company bureaucracy;

and having an idea submission scheme in place (whereby employees are

encouraged to submit new product ideas and are rewarded or recognized

for good new product ideas).

1.3.8 Top Management Support

Top management support is a necessary ingredient for successful product

innovation. Top management ’s main role is to set the stage for product

innovation, to be a behind-the-scenes facilitator and much less an actor

A positive climate and cul-ture that supports product innovation is one of the strongest discriminators between best and worst performers.


front and center (Cooper, 2011b; American Productivity & Quality Center,

2003; Cooper, Edgett, and Kleinschmidt, 2003; Edgett, 2011).

In best-performing businesses, senior management makes a long-term

commitment to product innovation as a source of growth. It develops a

vision, objectives, and a strategy for product innovation. And it makes

available the necessary resources for product development and ensures

that they aren ’t diverted to more immediate needs in times of shortage.

In addition, management commits to a disciplined idea-to-launch system

to drive products to market.

Most important, senior management is engaged in the new product

process, reviewing projects, making timely and fi rm Go/Kill decisions, and

if Go, making resource commitments to project teams. And management

empowers project teams and supports committed champions by acting as

mentors, facilitators, “godfathers,” or sponsors of project leaders and teams.

1.3.9 A Multistage, Disciplined Idea-to-Launch System

A systematic idea-to-launch methodology – such as a Stage-Gate® system 1 —

is the solution that many companies have adopted in order to overcome

the defi ciencies that plague their new product efforts (Cooper, 2011a;

Edgett, 2011; Griffi n, 1997; Lynn, Skov,

and Abel, 1999; Menke, 1997). Stage-

Gate systems are simply roadmaps or

play books for driving new products

from idea to launch successfully and

effi ciently. The 2010 APQC benchmark-

ing study reveals that 88 percent of U.S.

businesses employ such a process, and

it identifi ed the stage-and-gate process

as one of the strongest best practices, employed by almost every best-per-

forming business (Cooper and Edgett, 2012). And the payoffs of such pro-

cesses have been frequently reported: improved teamwork; less recycling

and rework; improved success rates; earlier detection of failures; a better

launch; and even shorter cycle times (reduced by about 30 percent).

The goal of a robust idea-to-launch system is to combine the best

practices outlined in this chapter into a single methodology or model so

that these success drivers or practices happen by design, not by accident.

Leading companies have adopted a Stage-Gate system, a method developed by the author, to accelerate new product projects from idea to launch.

1Stage-Gate® is a registered trademark of Stage-Gate International Inc. in the United

States; see www.stage-gate.com.


A typical idea-to-launch system is shown in Figure 1.7 for major projects , which

breaks the innovation process into fi ve stages (Cooper, 2011a). Each stage

consists of a set of concurrent, cross-functional, proven, and prescribed activ-

ities to be undertaken by the cross-functional team. Best practices, such as

solid front-end homework, sharp fact-based product defi nition, spiral devel-

opment, and VoC are built into the various stages by design. Required deliv-

erables are defi ned for the end of each stage—expectations are thus clear.

Here are the stages:

Discovery: the ideation stage, which involves prework designed to

discover and uncover opportunities and generate ideas. Multiple

sources of ideas should be accessed, although some sources and

methods are more popular or more effective than others (Cooper

and Edgett, 2008).

Stage 1. Scoping: a quick investigation and sculpting of the project.

This fi rst and inexpensive homework stage has the objective of

determining the project ’s technical and marketplace merits. Stage 1

involves desk research or detective work—little or no primary

Gate 1

Discovery:Ideas

Generation

Stage 1:Scoping

Stage 2: BuildBusiness

Case

Stage 3:Development

Stage 4:Testing &Validation

Stage 5:Launch

Go toDevelopment

Gate 2 Gate 3 Gate 4 Gate 5

Idea Screen 2nd Screen Go to Test Go to Launch PostlaunchReview

PLR

The Customer or User

For Less Complex and Smaller Development Projects,Use an Abbreviated Version: 2–3 Gates

FIGURE 1.7 THIS FIVE-STAGE IDEA-TO-LAUNCH STAGE-GATE SYSTEM IS FOR MAJOR PRODUCT DEVELOPMENT PROJECTS.

Used with permission from Cooper (2011a), Chapter 4.


research is done here. Prescribed activities include preliminary

market, technical, and business assessments (see Figure 1.2 ).

Stage 2. Build the Business Case: the detailed homework and up-front

investigation work. This second homework stage includes actions

such as a detailed market analysis, user needs and wants studies to

build in VoC, competitive benchmarking, concept testing, detailed

technical assessment, source of supply assessment, and a detailed

fi nancial and business analysis. The result is a business case —a defi ned

product, a business justifi cation, and a detailed plan of action for the

next stages.

Stage 3. Development: the actual design and development of the new

product. Stage 3 witnesses the implementation of the development

plan and the physical development of the product. Lab tests, in-house

tests, or alpha tests ensure that the product meets the requirements

under controlled conditions. The deliverable at the end of Stage 3 is

an in-house-tested (alpha-tested) prototype of the product, partially

tested with the customer.

Stage 4. Testing and Validation: the verifi cation and validation of the

proposed new product, its marketing and production. This stage

tests and validates the entire viability of the project: the product itself

via customer tests, beta tests, or fi eld trials; the operations process via

trial or limited production runs or operations trials; customer accep-

tance by way of a test market, simulated test market, or trial sell; and

the fi nancial justifi cation required prior to full launch.

Stage 5. Launch: full commercialization of the product—the

beginning of full operations and commercial launch and selling.

The postlaunch plan—monitoring and fi xing—is implemented,

along with early elements of the life cycle plan (new variants and

releases; continuous improvements).

Some 12–18 months after launch, the Post Launch Review occurs.

The performance of the project versus expectations is assessed (team

accountability is a key review issue), along with reasons why and lessons

learned; the project team is disbanded and recognized; and the project

is terminated.

Preceding each stage in Figure 1.7 is a gate. These gates are the qual-ity control checkpoints in the system: Are we doing the right project, and

are we doing the project right? At each gate, the project team meets with

senior management, the gatekeepers , to seek approval and resources for


their project. The gates thus open the door for the project to proceed

to the next stage and also commit the necessary resources—people and

funds—to the project and team to move forward.

Each Go/Kill gate specifi es deliverables (what the project team must

deliver to that gate review); criteria for Go (e.g., a scorecard outlined

above in Section 1.3.2) upon which the Go/Kill and prioritization deci-

sions are based; and outputs (an action plan for the next stage and

resources approved).

Since Stage-Gate was fi rst introduced, it has undergone many changes

and improvements, and some firms have even deployed their third- generation version of the system. New practices built into Stage-Gate include

(Cooper, 2008)

• Adapting the process for open innovation —for the inclusion of ideas,

intellectual property, R&D work, and even fully developed products

from outside the firm (Crawford, 1992; Docherty, 2006; Grölund,

Rönneberg, and Frishammar, 2010)

• Making the process scalable—for example, Lite and XPress versions

of Stage-Gate for lower-risk and smaller projects; and even differ-

ent versions of Stage-Gate to handle different types of development

projects, such as Stage-Gate-TD for technology platform developments

( Cooper, 2011a)

• Creating a leaner idea-to-launch system—removing all waste and factor-

ing in continuous improvement—by utilizing principles borrowed from

lean manufacturing

• Making the Stage-Gate system part of the total Product Life Cycle Manage-ment System —from idea to product exit many years later (Cooper, 2011a)

• Building in tough gates—gates with teeth—to focus scarce development

resources on the highest-value-to-the-corporation projects, culling out

the weaker projects (Cooper, 2009)

• Making the system more adaptive and agile—for example, by using

spiral development, and accelerating the process via concurrent activi-

ties (overlapping activities) and even overlapping stages—moving

forward with partial information (Cooper, 2008)

• Automating the idea-to-launch system via new software products that

handle everything from idea management to the development process

and even resource management. 2

2 Some software products have been evaluated; see www.stage-gate.com .


1.4 Summary

Generating a continuous stream of new product successes is an elusive

goal. But the quest goes on, because the goal is so important to business

success. This chapter has provided an overview of some of the key driv-

ers of new product performance, and hence insights into how to win in

developing and launching new products.

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4th ed. New York: Basic Books.

Cooper, R.G. (2011b). Perspective: The innovation dilemma—How to innovate when

the market is mature. Journal of Product Innovation Management 28(7): 2–27.

Cooper, R.G. and Dreher, A. (Winter 2010). Voice of customer methods: What is

the best source of new product ideas? Marketing Management Magazine , 38–43.

For the extended online version, see http://www.marketingpower.com/

ResourceLibrary/Publications/MarketingManagement/2010/4/38-48_Xtended

version3.pdf

Cooper, R.G. & Edgett, S.J. (2002). The dark side of time and time metrics in

product innovation. Visions XXVI(22): 14–16.

Cooper, R.G. & Edgett, S.J. (2003). Overcoming the crunch in resources for new

product development. Research-Technology Management 46(3): 48–58.

Cooper R.G. & Edgett, S.J. (2006). Ten ways to make better portfolio and project

selection decisions. Visions XXX(3): 11–15.

Cooper, R.G. & Edgett, S.J. (2008). Ideation for product innovation: What are the

best sources? Visions XXXII(1): 12–17.

Cooper, R.G. & Edgett, S.J. (2010). Developing a product innovation and technology

strategy for your business. Research-Technology Management 53(3): 33–40.


Cooper, R.G. & Edgett, S.J. (2012). Best practices in the idea-to-launch process and

its governance. Research-Technology Management 55(2): 43–54.

Cooper, R.G., Edgett, S.J., & Kleinschmidt, E.J. (2002a). Portfolio management:

Fundamental to new product success, in The PDMA Toolbox for New Product development , edited by P. Beliveau, A. Griffi n, and S. Somermeyer. New York:

Wiley, pp. 331–364.

Cooper, R.G., Edgett, S.J. & Kleinschmidt, E.J. (2002b). Portfolio Management for New Products , 2nd ed. Reading, MA: Perseus Books.

Cooper, R.G., Edgett, S.J., and Kleinschmidt, E.J. (2003). Best Practices in Product Development: What Distinguishes Top Performers (American Productivity & Quality

Center Study). Ancaster, Ontario, Canada: Product Development Institute, Inc.;

see www.prod-dev.com

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Journal of Product Innovation Management 16(6): 530–544.

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with the Product Development Institute, Inc., Ancaster, ON, Canada.

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Development & Management Association.

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analysis of the literature. Journal of Product Innovation Management 13: 191–215.

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Stage-Gate process: A revised model for new product development. California Management Review 5(3): 106–131.

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product selling performance. Journal of Product Innovation Management 17(6):

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dimensions and their relationships with product advantage, product fi nancial

performance, and project protocol. Journal of Product Innovation Management 27(1): 991–1006.

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performance: A review and meta-analysis. Journal of Product Innovation Management 11(5): 397–417.

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product performance: A group effectiveness perspective. Journal of Product Innovation Management 27(4): 554–571.

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Antecedents and consequences of a decomposed product advantage. (2011).

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enhance or impede innovation and fi rm performance? Journal of Product Innovation Management 28(4): 503–520.

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from losers. Journal of Product Innovation Management 13(5): 422–439.

Robert G. Cooper is President of the Product Development Institute

Inc.; Professor Emeritus at the DeGroote School of Business, McMaster

University in Hamilton, Ontario, Canada; and ISBM Distinguished

Research Fellow at Pennsylvania State University ’s Smeal College of

Business Administration.

Dr. Cooper is a world expert in the fi eld of new product management

and the father and developer of the Stage-Gate ® system, now widely used

by leading fi rms around the world to drive new products to market. He is

a thought leader in the fi eld of product innovation management. He has

published more than 120 articles and chapters in leading journals and

books on new product management, with many award winners, and he

has written six books on new product management, including the popular

Winning at New Products: Creating Value Through Innovation (4th ed.). He is

a Fellow of the PDMA.

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